Ethics is primarily a question of being right or wrong in the eyes of others. In business, ethics may be defined as a set of standards that determine one’s moral standing. It is about being fair to the consumers and competitors. Philip Morris International is a global firm with a large market share in the tobacco industry. It is a company that has over the years been placed in a limelight by its alleged unethical conduct, especially with regards to its marketing strategy and child labor. In the tobacco industry, cases of unethical marketing strategy are widespread, especially due to the controversy that surrounds cigarettes’ advertising. The issue of child labor at tobacco farms, especially in the former Soviet Union, has caused a lot of uproar and questions over the company’s attitude to it (WHO, 2004).
This paper examines the Philip Morris Company in a bid to establish how it handles these two challenges in its activity and how does it affect the company, as a whole.
Case Study 1: Philip Morris International’s Marketing Strategy
The Philip Morris Company is a global tobacco company that deals with manufacturing and distribution of cigarettes (Philip Morris, 2012). This company, thus, engages in active marketing campaigns across the globe in a bid to push sales and make profits. Over the years, however, more and more nations have formulated policies against exaggerated advertising and marketing campaigns which encourage smoking. In addition, the manufacturers are now required to state the dangers of their products on the packaging so that consumers were well aware of what harm they cause to their organism. This has been further necessitated by the researches that showed a strong link between the components of tobacco smoke and diseases, such as, lung cancer.
Philip Morris currently prints a notice on its packages stating that smoking is hazardous to one’s health. The company, however, still engages in aggressive marketing to encourage consumers to smoke cigarettes. This may be understandable, considering that the company depends solely on the consumption of these cigarettes. To survive in a very demanding industry with so many regulations, the company has invested in soft marketing mechanisms through which, it continues to portray the act of smoking as a symbol of being cool and liberated. This sort of advertising may not be categorized as illegal, but it definitely is unethical given that other tobacco companies refrain from such content.
In his analysis, Harris (2012) established that at some point, Philip Morris employed young girls to sell cigarettes to teenagers of a school age in a bid to boost sales. Moreover, the company continued to portray smokers as young people who were in control of their lives. When the company was confronted with these allegations by industry regulators, the management maintained that the company had a strong policy that prohibited the sale of its products to underage persons. In addition, the Philip Morrison accused its competitors of engaging in a smear campaign aimed at maligning the company’s reputation. Despite knowing the dangers of their products, Philip Morris actually continues encouraging consumers in the less developed countries which do not have strict regulatory measures (WHO, 2004). This is unethical and unfair towards the consumers who are not aware of the dangers that tobacco causes to underage smokers.
In addition, the warning on the package is not enough to deter smokers given the addictive nature of tobacco smoke. The warning is thus just a condition being met, and it does not in any way cancel the extensive soft marketing employed by the company to push its sales, especially in the developing and undeveloped countries (Harris, 2012).
To be considered ethical, the company will first of all recognize the harmful effects of smoking and take time-out to educate its consumers to ensure that they make deliberate choice. Smoke-related ailments ruin so many lives on an annual basis, and the right thing to do would be to let these people know that their choice has dire consequences (Jost, 1999). Also, the company would have to quit marketing techniques that make smoking look attractive, especially to teenagers. While ignorance is not a defense, these young people are easy prey as they want to look cool and exercise their freedom. Encouraging them to smoke only destroys their life and life of their children.
The company is thus accused of hiding the dangers associated with smoking. The ideal solution that will justify the company is shutting down operations and getting into some other line of business. The shock may be irreparable for the company. However, after numerous researches, the company should accept this fact and refrain from encouraging young adults to ruin their chances for long fulfilling life.
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Case Study 2: Philip Morris and the Child Labor Issue
The tobacco farms in the former Soviet Union nations have come under some serious criticisms over the years due to child labor. The poverty level in these countries has necessitated the employment of children as young as ten years to support their families by contributing to the family income. These farms take advantage of the economic situations of these families to exploit children by using them as farmhands for minimal pay. The children are considered better workers as they are easier to exploit and work so much for less pay (Campaign for Tobacco-Free Kids, 2010).
As a company in the tobacco industry, Philip Morris is a part of this child labor trail. The company may publicly condemn the act and even state that it did not purchase tobacco from the Soviet Union countries, but it does not in any way solve the problem at hand. Being an international tobacco company, Philip Morris could probably handle this problem much better by coming up with a CSR initiative to keep these child laborers in school and generate income for their families through lobbying better wages for adult laborers (Campaign for Tobacco-Free Kids, 2010).
The ethical issues surrounding the Philip Morris Company are serious, and they require the company’s utmost attention since they will eventually lead to bankruptcy through the negative company’s image that is being portrayed. People are getting more and more conscious of what companies do other than just manufacturing and selling products. It means that Philip Morris can not only lose its impressive market share to more honest competitors but create a negative lasting image that will haunt it in whatever line of business it chooses to venture. The current business environment requires that businesses organization conduct their affairs in the most ethical manner possible. In addition, the regulating authority expects businesses to be mindful of the society and operate within the laid down protocols.
Philip Morris is involved in a type of business that under any circumstances cannot be considered as morally right or ethically just. The leading researchers believe that tobacco alone causes about 20% of the annual deaths, and these are only the documented incidents in developed countries. It implies that there may be so many more deaths that can be traced back to tobacco, which makes the industry unethical as a whole. Being a part of child labor trail, Philip Morris could come up with a CSR initiative of lobbying better wages to the adult laborers. Also, the company has to quit marketing techniques that make smoking look attractive, especially to teenagers.